Industrial and infrastructure stocks are poised to gain traction alongside the artificial intelligence boom, according to Mike Atkins of ETF Action. Speaking to CNBC’s 'ETF Edge,' the founding partner noted that current policy and consumer trends create a favorable setup for these traditionally underperforming sectors.
Atkins emphasized, 'You're witnessing a shift from globalization towards reshoring, which has significant potential.'
Ryan O'Connor, CEO of Global X, echoed similar optimism, highlighting that these sectors are integral to supporting the AI growth. His firm manages the Global X U.S. Infrastructure Development ETF (PAVE), which monitors companies involved in construction and industrial projects.
'Infrastructure holds significant importance to us, given PAVE is our largest ETF,' O'Connor stated, adding that reshoring efforts present intriguing opportunities within infrastructure domains.
Year-to-date, the Global X infrastructure ETF has increased by 16%, while the VanEck Semiconductor ETF (SMH), which includes AI leaders Nvidia, Taiwan Semiconductor, and Broadcom, has surged by 42% as of the last market close. This month, both ETFs have trended downwards, but Global X's infrastructure fund is outperforming with top holdings in Howmet Aerospace, Quanta Services, and Parker Hannifin.
O'Connor also pointed out that electrification is another positive driver for supporting the AI boom. 'Electrification of the U.S. economy is crucial for sustaining AI growth,' he noted, highlighting the Global X U.S. Electrification ETF (ZAP), which has increased by almost 24% this year. Notably, this ETF is also outperforming the VanEck Semiconductor ETF this month.